Economy brand cull reduces "complexity and cost" - Molson Coors Beverage Co CEO - Just Drinks
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Economy brand cull reduces “complexity and cost” – Molson Coors Beverage Co CEO

By Andy Morton 13 Sep 2021

Gavin Hattersley defended the recent move, which he said displeased some US wholesalers.

Economy brand cull reduces “complexity and cost” – Molson Coors Beverage Co CEO

Molson Coors Beverage Co Gavin Hattersley CEO has admitted some US wholesalers were unhappy with his decision to cut 11 economy beers but said the brands were dragging on margins and complicating brewery operations.

Speaking to analysts last week, Hattersley acknowledged discontent from wholesalers in regions where the axed beers were important. “There are distributors that are not happy,” he said.

However, defending his decision at the Barclays Global Consumer Staples Conference, he explained that “almost all” of Molson Coors’s volumes losses in Q2 came from economy brands and SKUs. He added that discontinuing the brands will streamline production.

“Yes, it will affect us for the next few quarters, but not from a margin point of view,” Hattersley said. “It reduces complexity and cost in out breweries because of fewer changeovers and longer run times.”

Molson Coors announced in July it was to discontinue 11 economy beers. The brands included Milwaukee’s Best Premium and Keystone Ice.

Hattersley also reiterated his company’s faith in US hard seltzer despite signs the category’s fast growth is slowing.

“We always said seltzer wouldn’t grow as fast as others said it was going to,” the CEO explained. “We said it was going to be a big segment, and we want to play in it.”

Last week, The Boston Beer Co announced it will write down some of its hard seltzer stock because of lower-than-expected demand.

Does Boston Beer Co’s slowdown mean hard seltzer has lost its lustre? – Click here for an analysis